ID card plans set to rise in cost

But new figures undercut estimates

The estimated costs of the UK government's ID cards plan have risen by £400 million for the 10 years to October 2016, new Home Office figures reveal.

Ministers have been under pressure to keep MPs informed of changes in the projected costs of the controversial plan, while earlier this month the Information Tribunal ordered the government to publish the gateway reviews of the project carried out by the Office of Government Commerce (OGC).

But the new Home Office figures are well below estimates produced by the IT capacity and performance consultancy Capacitas in February, which suggested that the plan could grow to hit the £12.4 billion price tag attached to the NHS's National Programme for IT.

Home Office figures issued in October last year had put the cost of the ID cards programme – a flagship government policy – at £5.42bn over the 10 years to October 2016. But a report on costs presented to Parliament shows that the projected costs have risen, despite adjustments to deduct Foreign Office costs from the total.

The report shows that the £5.42bn figure included set-up costs of £290 million and operational costs of £5.1bn. But it notes that these figures included costs run up by the Foreign Office in maintaining consular services abroad and recovered in a surcharge on the passport fee.

Costs of £510m "should have been excluded as they do not form part of the National Identity Scheme," the report says. Deduction of these costs would put the cost of the ID card programme at £4.91bn.

But an update of the business case since the publication of the October 2006 cost figures has meant changes to the estimated costs to take account of increased staffing, with more staff required both to deliver the plan and to check passport and ID card applications in its early years.

Estimated production costs have been reduced, however, "to reflect the experience gained in the recent successful introduction of ePassports," the report says.

The new figures for the cost of the plan covering British and Irish citizens resident in the UK, for the 10 years to October 2016, put set-up costs at £300m and operational costs at £5,010m. The total figure is now £5,310m – up £400m on last October's estimates if the deduction of Foreign Office costs is taken into account.

The report also provides an estimate for the 10-year costs with April 2007 taken as the starting point, which includes adjustments to bring the figures to 2007-08 prices and to take account of new start and end points. This produces a total cost of £5,550m for the 10 years to April 2017.

All the figures in the report include provisions for "optimism bias" – he known tendency for people to be over-optimistic about costs and benefits of planned actions.